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Regulators… Captured: AT&T Gets FCC to Omit Bad Internet Speed Scores It Doesn’t Like

AT&T was unhappy with the low internet speed score the FCC was about to give the telecom giant, so it made a few phone calls and got the government regulator to effectively rig the results in its favor.

“Regulatory capture” is a term becoming more common in administrations that enable regulators that favor friendly relations with large companies over consumer protection, and under the Trump Administration, a very business-friendly FCC has demonstrated it is prepared to go the distance for some of the country’s largest telecom companies.

Today, the Wall Street Journal reported AT&T successfully got the FCC to omit DSL speed test results from the agency’s annual “Measuring Broadband America” report. Introduced during the Obama Administration, the internet speed analysis was designed to test whether cable and phone companies are being honest about delivering the broadband speed they advertise. Using a small army of test volunteers that host a free speed testing router in their home (full disclosure: Stop the Cap! is a volunteer host), automated testing of broadband performance is done silently by the equipment on an ongoing basis, with results sent to SamKnows, an independent company contracted to manage the data for the FCC’s project.

In 2011, the first full year of the program, results identified an early offender — Cablevision/Optimum, which advertised speed it couldn’t deliver to many of its customers because its network was oversold and congested. Within months, the company invested millions to dramatically expand internet capacity and speeds quickly rose, sometimes beyond the advertised level. In general, fiber and cable internet providers traditionally deliver the fastest and most reliable internet speed. Phone companies selling DSL service usually lag far behind in the results. One of those providers happened to be AT&T.

In the last year, the Journal reports AT&T successfully appealed to the FCC to keep its DSL service’s speed performance out of the report and withheld important information from the FCC required to validate some of the agency’s results.

The newspaper also found multiple potential conflicts of interest in both the program and SamKnows, its contracted partner:

  • Providers get the full names of customers using speed test equipment, and some (notably Cablevision/Optimum) regularly give speed test customers white glove treatment, including prioritized service, performance upgrades and extremely fast response times during outages that could affect the provider’s speed test score. Jack Burton, a former Cablevision engineer said “there was an effort to make sure known [users] had up-to-date equipment” like modems and routers. Cablevision also marked as “high priority” the neighborhoods that contained speed-testing users, ensuring that those neighborhoods got upgraded ahead of others, said other former Cablevision engineers close to the effort.
  • Providers can tinker with the raw data, including the right to exclude results from speed test volunteers subscribed to an “unpopular” speed tier (usually above 100 Mbps), those using outdated or troublesome equipment, or are signed up to an “obsolete” speed plan, like low-speed internet. Over 25% of speed test results (presumably unfavorable to the provider) were not included in the last annual report because cable and phone companies objected to their inclusion.
  • SamKnows sells providers immediate access to speed test data and the other data volunteers measure for a fee, ostensibly to allow providers to identify problems on their networks before they end up published in the FCC’s report. Critics claim this gives providers an incentive to give preferential treatment to customers with speed testing equipment.

Some have claimed internet companies have gained almost total leverage over the FCC speed testing project.

The Journal:

Internet experts and former FCC officials said the setup gives the internet companies enormous leverage. “How can you go to the party who controls the information and say, ‘please give me information that may implicate you?’ ” said Tom Wheeler, a former FCC chairman who stepped down in January 2017. Jim Warner, a retired network engineer who has helped advise the agency on the test for years, told the FCC in 2015 that the rules for providers were too lax. “It’s not much of a code of conduct,” Mr. Warner said.

An FCC spokesman told the Journal the program has a transparent process and that the agency will continue to enable it “to improve, evolve, and provide meaningful results as we move forward.”

The stakes of the FCC’s speed tests are enormous for providers, now more reliant than ever on the highly profitable broadband segment of their businesses. They also allow providers to weaponize  favorable performance results to fight off consumer protection efforts that attempt to hold providers accountable for selling internet speeds undelivered. In some high stakes court cases, the FCC’s speed test reports have been used to defend providers, such as the lawsuit filed by New York’s Attorney General against Charter Communications over the poor performance of Time Warner Cable. The parties eventually settled that case.

In 2018, the key takeaway from the report celebrated by providers in testimony, marketing, and lobbying, was that “for most of the major broadband providers that were tested, measured download speeds were 100% or better of advertised speeds during the peak hours.”

Comcast often refers to the FCC’s results in claims about XFINITY internet service: “Recent testing performed by the FCC confirms that Comcast’s broadband internet access service is one of the fastest, most reliable broadband services in the United States.” But in 2018, Comcast also successfully petitioned to FCC to exclude speed test results from 214 of its testing customers, the highest number surveyed among individual providers. In contrast, Charter got the FCC to ignore results from 148 of its customers, Mediacom asked the FCC to ignore results from 46 of its internet customers.

Among the most remarkable findings uncovered by the Journal was the revelation AT&T successfully got the FCC to exclude all of its DSL customers’ speed test results, claiming that it would not be proper to include data for a service no longer being marketed to customers. AT&T deems its DSL service “obsolete” and no longer worthy of being covered by the FCC. But the company still actively markets DSL to prospective customers. This year, AT&T also announced it was no longer cooperating with SamKnows and its speed test project, claiming AT&T has devised a far more accurate speed testing project itself that it intends to use to self-report customer speed testing data.

Cox also managed to find an innovative way out of its poor score for internet speed consistency, which the FCC initially rated a rock bottom 37% of what Cox advertises. Cox claimed its speed test results were faulty because SamKnows’ tests sent traffic through an overcongested internet link yet to be upgraded. That ‘unfairly lowered Cox’s ratings’ for many of its Arizona customers, the company successfully argued, and the FCC put Cox’s poor speed consistency rating in a fine print footnote, which included both the 37% rating and a predicted/estimated reliability rating of 85%, assuming Cox properly routed its internet traffic.

The FCC report also downplays or doesn’t include data about internet slowdowns on specific websites, like Netflix or YouTube. Complaints about buffering on both popular streaming sites have been regularly cited by angry customers, but the FCC’s annual report signals there is literally nothing wrong with most providers.

Providers still fear their own network slowdowns or problems during known testing periods. The Journal reports many have a solution for that problem as well — temporarily boosting speeds and targeting better performance of popular websites and services during testing periods and returning service to normal after tests are finished.

James Cannon, a longtime cable and telecom engineering executive who left Charter in February admitted that is standard practice at Spectrum.

“I know that goes on,” he told the Journal. “If they have a scheduled test with a government agency, they will be very careful about how that traffic is routed on the network.”

As a result, the FCC’s “independent” annual speed test report is now compromised by large telecom companies, admits Maurice Dean, a telecom and media consultant with 22 years’ experience working on streaming, cable and telecom projects.

“It is problematic,” Dean said. “This attempt to ‘enhance’ performance for these measurements is a well-known practice in the industry,’ and makes the FCC results “almost meaningless for describing actual user experience.”

Tim Wu, a longtime internet advocate, likened the speed test program as more theoretical than actual, suggesting it was like measuring the speed of a car after getting rid of traffic.

India Getting 100 Mbps Fiber-to-the-Home Service for Under $10/Month

Jio founder Mukesh Ambani formally announces the launch of Jio Fiber.

Starting Thursday, the first 500,000 of over 15 million Indians pre-registered for service will begin receiving fiber to the home broadband at speeds starting at 100 Mbps, bundled with free unlimited voice calling for under $10 per month.

Jio Giga Fiber will eventually serve more than 20 million Indian homes and businesses in over 1,600 communities, charging a fraction of the prices charged by North American cable and phone companies, and expects to remain profitable by selling extra services, including unlimited global calling plans and television service, to Indian consumers. To sweeten the deal, customers that commit to a year of service will receive a 4K LED TV and set-top box for free.

Jio has already laid over 186,000 miles of optical fiber and has an existing base of 500,000 trial customers across India that have been testing the service.

Jio is India’s largest wireless provider, with over 323 million subscribers, making it the third largest mobile operator in the world. It is also one the newest, having launched wireless service in late 2015 over an expansive 4G LTE network. The company was founded by Mukesh Dhirubhai Ambani, one of Asia’s wealthiest men. His vision is to make telecommunications services affordable and available to the largest number of people possible, with an emphasis on making entry-level plans usable and affordable. His presence in the Indian telecom market has caused the same marketplace disruption T-Mobile has caused in the U.S.

Jio’s chief competitor, the state-owned BSNL telephone company, is rumored to be negotiating with several of India’s independent cable and internet providers to offer a competing joint bundle of TV, landline, and broadband services over optical fiber at prices under $9.75/month.

If both companies are successful, Indians will have access to some of the cheapest internet service in the world. 

Jio Fiber is designed to provide India with fiber broadband service as good or better than what is available in the United States and Canada, for a much cheaper price. Ambani noted the average broadband speed in the U.S. is now 90 Mbps, but Jio Fiber will beat that with plans starting at 100 Mbps. He has successfully navigated around skeptical investors by putting up more than $30 billion of his firm’s own money to back the telecom venture, instead of returning that money to shareholders in the form of dividend payouts and share buybacks. He can raise even more cash by selling and leasing back Jio’s extensive network of wireless cell sites.

Ambani sees Jio’s fiber network as a foundation for marketing additional products and services. Wealthier Indians will be invited to spend up to $139 a month on gigabit internet, a deluxe TV package with over 600 TV channels, a landline with unlimited international calling, and access to popular movies on the same day titles are released in Indian theaters. Customers with premium level service will also get free subscriptions to “most” popular video streaming services available in India (excluding Netflix and Amazon Prime Video). One downside to Jio’s plan — it comes with a 100 GB monthly data cap. Those exceeding it will see their speeds reduced to 1 Mbps for the rest of the current billing period. There is no word yet about the availability of unlimited use plans at an additional cost.

Jio has been strategically planning to introduce fiber service for several years and has purchased several Indian cable companies to help manage infrastructure, installation, and a network of retail stores that will act as a sales point for Jio’s wireless and fiber services.

Jio’s Mukesh Ambani introduces India to Jio’s new fiber to the home service, which will cost under $10 a month. (6:59)

Wall Street Journal Says Faster Internet Not Worth It, But They Ignore Bottlenecks and Data Caps

The Wall Street Journal believes the majority of Americans are paying for internet speed they never use or need, but their investigation largely ignores the question of traffic bottlenecks and data caps that require many customers to upgrade to premium tiers to avoid punitive overlimit fees.

The newspaper’s examination was an attempt to test the marketing messages of large cable and phone companies that claim premium speeds of 250, 500, or 1,000 Mbps will enhance video streaming. A total of 53 journalists across the country performed video streaming tests over a period of months, working with researchers at Princeton University and the University of Chicago to determine how much of their available bandwidth was used while streaming videos from Netflix, Amazon Prime Video, YouTube and other popular streaming services.

Unsurprisingly, the newspaper found most only need a fraction of their available internet speed — often less than 10 Mbps — to watch high quality HD streaming video, even with up to seven video streams running concurrently. That is because video streaming services are designed to produce good results even with lower speed connections. Video resolution and buffering are dynamically adjusted by the streaming video player depending on the quality of one’s internet connection, with good results likely for anyone with a basic broadband connection of 10-25 Mbps. As 4K streams become more common, customers will probably get better performance with faster tiers, assuming the customer has an unshaped connection that does not throttle video streaming speeds as many mobile connections do and the streaming service offers a subscription tier offering 4K video. Netflix, for example, charges more for 4K streams. Some other services do not offer this option at all.

Image: WSJ

WSJ:

For most modern televisions, the highest picture clarity is the “full” high-definition standard, 1080p, followed by the slightly lower HD standard, 720p, then “standard resolution,” 480p. The Journal study found a household’s percentage of 1080p viewing had little to do with the speed it was paying for. In some cases, streaming services intentionally transmit in lower resolution to accommodate a device such as a mobile phone.

When all HD viewing is considered—1080p and 720p—there were some benefits to paying for the very highest broadband tiers, those 250 Mbps and above.

Streaming services compress their streams in smart ways, so they don’t require much bandwidth. We took a closer look at specific services by gathering data on our households’ viewing over a period of months. Unlike the “stress test,” this was regular viewing of shows and movies, one at a time.

Netflix streamed at under 4 Mbps, on average, over the course of a show or movie, with not much difference in the experience of someone who was paying for a 15 Mbps connection and someone with a one gigabit (1,000 Mbps) connection. The findings were similar for the other services.

There is a brief speed spike when a stream begins. Netflix reached the highest max speeds of the services we tested, but even those were a fraction of the available bandwidth.

Users watching YouTube might launch a video slightly faster than those watching Netflix, and at lower resolution, but this is a function of how those services work, not your broadband speed, the researchers said.

Whereas Netflix tries to load “nice high quality video” when you press play and hence has higher spikes, YouTube appears to “want to start as fast as possible,” said Paul Schmitt, one of the researchers.

A spokeswoman for Alphabet Inc.’s YouTube said the service chooses playback quality based on factors including type of device, network speed, user preferences and the resolution of the originally uploaded video. A Netflix Inc. spokeswoman said the company aims to deliver quality video with the least possible bandwidth. Amazon.com Inc. had no comment.

The Journal finds little advantage for consumers subscribing to premium speed tiers, if they did so hoping for improved streaming video. The unanswered question is why customers believe they need faster internet speeds to get those improvements in the first place.

The answer often lies in the quality of the connection between the streaming provider and the customer. There are multiple potential bottlenecks that can make a YouTube video stutter and buffer on even the fastest internet connection. Large providers have had high profile disputes with large streaming companies over interconnection agreements that bring Netflix and YouTube traffic to those internet service providers’ customers. Some ISPs want compensation to handle the increasing amount of incoming video traffic and have intentionally not allowed adequate upgrades to keep up with growing subscriber demand. This creates a traffic bottleneck, usually most noticeable at night, when even a small YouTube video can get stuck buffering. Other streaming videos can suffer from repeated pauses or deteriorate into lower resolution video quality, regardless of the speed of your connection.

Another common bottleneck comes from oversold service providers that have too much traffic and not enough capacity to manage it. DSL and satellite internet customers often complain about dramatic slowdowns in performance during peak usage times in the evenings and on weekends. In many cases, too many customers in a neighborhood are sharing the connection back to the phone company. Satellite customers only have a finite amount of bandwidth to work with and once used, all speeds slow. Some other providers do not pay for a large enough pipeline to the internet backbone, making some traffic slow to a crawl when that connection is full.

Customers are sold on speed upgrades by providers that tell them faster speeds will accommodate more video traffic, which is true but not the whole answer. No amount of speed will overcome intentional traffic shaping, an inadequate connection to the video streaming service, or an oversold network. Too bad the Journal did not investigate these conditions, which are more common than many people think.

Finally, some customers feel compelled to upgrade to premium tiers because their provider enforces data caps, and premium tiers offer larger usage allowances. Cable One, Suddenlink, and Mediacom customers, among others, get a larger usage allowance upgrading. Other providers offer a fixed cap, often 1 TB, which does not go away unless a customer pays an additional monthly fee or bundles video service.

Data caps are a concern for video streaming customers because the amount of data that can be consumed in a month is substantial. As video quality improves, data consumption increases. The Journal article does not address data caps.

Finally, the Journal investigation confined itself to video streaming, but internet users are also increasingly using other high traffic services, especially cloud backup and downloading, especially for extremely large video game updates. The next generation of high bandwidth internet applications will only be developed if high speed internet service is pervasive, so having fast internet speed is not a bad thing. In fact, providers have learned it is relatively cheap to increase customer speeds and use that as a justification to raise broadband prices. Other providers, like Charter Spectrum, have dropped lower speed budget plans to sell customers 100 or 200 Mbps service, with a relatively inexpensive upgrade to 400 Mbps also gaining in popularity.

Does the average consumer need a premium speed tier for their home internet connection? Probably not. But they do need affordable unlimited internet service free of bottlenecks and artificial slowdowns, especially at the prices providers charge these days. That is an investigation the Journal should conduct next.

NY PSC Clarifies Broadband Speed Requirement Merger Terms

Charter Communications is not obligated to upgrade New York internet customers to a minimum internet speed of 300 Mbps, according to a letter of clarification directed to Stop the Cap! and received today from the New York State Department of Public Service.

DPS:

In the Commission’s 2016 order, Charter was required to offer broadband internet service with speeds up to 100 Mbps to all customers served by its New York networks (including its Columbia County systems) by the end of 2018; and offer broadband internet service with speeds up to 300 Mbps to all customers served by its New York networks by the end of 2019. At the time of the Commission’s decision, although Time Warner operated some systems in New York that were already capable of offering customer speeds up to 300 Mbps, the majority of Time Warner customers in Upstate New York were limited to broadband speeds of 50 Mbps.

Charter was therefore required to upgrade its network to be able to offer broadband service at speeds up to 300 Mbps by the end of 2019 but was not required to increase its minimum service offering to 300 Mbps. Charter has reported that it has complied with this condition ahead of schedule and Department of Public Service Staff has begun the process of independently field-testing Charter’s network to verify compliance with the condition.

Stop the Cap! raised this issue with the Commission as part of the recent settlement agreement between New York State and Charter Communications, and sought an official clarification. Approximately 40% of Charter’s national footprint now receives 200 Mbps download speeds while most New Yorkers receive just 100 Mbps for the same price, putting the state at a disadvantage.

Dampier

“The Commission’s language in the original merger agreement was unclear, because Time Warner Cable had already embarked on a statewide upgrade to its so-called ‘Maxx’ service tiers, which included free speed increases, negating most of the benefits of the state’s condition requiring Charter to upgrade broadband speeds as part of its terms to approve the merger,” said Phillip Dampier, founder and president of Stop the Cap! “In fact, this merger made things worse for New Yorkers because customers would have been getting Time Warner Cable Maxx speeds as much as a year earlier than what Spectrum finally delivered across the state, and customers would have been offered a number of options for less costly internet service that Spectrum dropped.”

Shortly after the merger was approved, Charter placed a moratorium on Time Warner Cable Maxx upgrades and spent months attempting to knit Charter’s existing systems with the much larger Time Warner Cable.

Time Warner Cable Maxx speeds were well on the way throughout Upstate New York before Charter acquired the company and issued an upgrade moratorium.

“Consumers already know from their cable bills that this merger was just another bad deal for New York, and now nearly half of Spectrum’s national service area gets twice the speed Upstate New York gets for the same price, and there is no pressure on the company to deliver any additional upgrades,” Dampier added.

Stop the Cap! also urged the Commission to do all it could to make life easier for customers in the New York City area, where Charter has been trying to rid itself of union technicians that have been on strike for over two years.

“For all the talk by state officials, including the governor, it appears there is no end in sight for this strike and customers are caught in the middle,” Dampier said. “We hear frequently from New York City consumers about substandard repair work and unacceptable installations that suggest the company is not using the best available workforce to take care of customer needs. Charter is making loads of money in profits and can afford to offer a square deal to workers to end this strike and get these technicians back to work.”

Stop the Cap Asks New York PSC for Clarification About Charter’s Internet Speed Obligations

 

 

July 15, 2019

Mr. John C. Rhodes
Chief Executive Officer, NY State Dept. of Public Service
Three Empire State Plaza
Albany, NY 12223-1350

Re: 15-01446/15-M-0388 Settlement Agreement: Joint Petition of Charter Communications and Time Warner Cable for Approval of a Transfer of Control of Subsidiaries and Franchises, Pro Forma Reorganization, and Certain Financing

cc: Hon. Kathleen Burgess

Dear Mr. Rhodes,

We are writing to receive clarification regarding the “Order Adopting 2019 Settlement Agreement and Reconsidering Other Related Actions” (issued and effective July 11, 2019).

On page 28 of that document, the Commission comments on Stop the Cap’s recommendation that Spectrum customers in New York State benefit from an immediate upgrade in download speed to 200 Mbps, which is presently available in approximately half of Charter Communications’ national footprint.

The Commission rejected our recommendation, commenting in response:

“Moreover, its request for internet speed upgrades are also beyond the scope of the 2019 Settlement agreement, but the Commission notes that Charter is already required to increase its network speed to 300 Mbps by the end of 2019.”

That response suggests the Public Service Commission considers Charter’s original merger obligations not yet achieved, because the current speed received by most Spectrum customers is 100 Mbps, not 300 Mbps.

However, Charter Communications considers its speed obligations to New York complete, and ahead of the scheduled deadline, as noted in its May 20, 2019 “Annual Update” to the PSC[1]:

“Moreover, under Condition I.A.2, by December 31, 2018, Charter was required to offer broadband service with download speeds up to 100 Mbps to all customers served in New York (including Columbia County) and speed levels up to 300 Mbps by the end of 2019. Charter has far exceeded these conditions, through its Spectrum Internet Gig service offering, which provides all customers throughout New York access to download speeds of up to 940 Mbps. Accordingly, Charter is pleased to report that its implementation of network modernization and broadband speed increases have been completed ahead of the specified the Merger Condition deadlines.”

We are writing to receive clarification about the Commission’s interpretation of the Merger Order and its definition of “network speed.”

The Commission made it a requirement that Charter “increase its network speed” to 300 Mbps by the end of 2019. We would like to know what the Commission considers “network speed.” Does that refer to speed a cable system is capable of optionally providing customers (that presumably choose to pay more for a premium service tier) or was that to be the defined minimum base speed of Spectrum’s entry-level residential broadband product (excluding Spectrum Internet Assist)?

Charter has interpreted the Merger Order to mean “download speeds up to 100 Mbps” for all customers and “speed levels up to” 300 Mbps, but only optionally, by the end of 2019.

Time Warner Cable operated cable systems in New York City, Central New York, and parts of the Hudson Valley and Capitol District that were already capable of offering customers the option of 300 Mbps service before the merger between Charter and Time Warner Cable was announced[2].

Does the Commission accept Charter’s interpretation of the Merger Order or does it believe Charter has a yet unfinished obligation to raise the base internet speed to all New York customers to at least 300 Mbps by the end of 2019?

We would greatly appreciate receiving clarification on this point, because it is apparent Charter is currently disadvantaging New York broadband customers with broadband service at half the speed offered in other states.

Very truly yours,

Phillip M. Dampier
President and Founder

[1] Charter Communications, Inc. Annual Update 2019, May 20, 2019 p. 3

[2] https://www.businesswire.com/news/home/20150714005039/en/Time-Warner-Cable-Announces-Expansion-%E2%80%98TWC-Maxx%E2%80%99 (July 14, 2015)

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